Early Termination Insurance

Early termination of your car’s lease, contract hire or PCP agreement can be very costly. It can mean having to pay substantial penalties and fees (in some cases including the remaining lease value), which is a situation that nobody wants to be in.

However, sometimes things happen that are out of your control and leave you with no choice but to decide on an early termination of your lease.

Early Termination Insurance, or ETI, will cover the cost of ending your agreement with the finance company in the event of certain scenarios that would cause you to return your vehicle before the agreed date.

Read on to find out more about Early Termination Insurance, what it covers and why it’s a policy that could provide you with an important extra layer of protection.

  • Covers new and used cars
  • Cover from 2 to 4 years
  • Claim limits of £7,000 to £15,000
  • Covers accidental death
  • Covers extended sickness
  • Covers loss of licence (for medical reasons)
  • Covers non-voluntary bankruptcy
  • A £500 cash benefit for PCP agreements

Why choose Direct Gap for Early Termination Insurance?

Here are just some of the reasons why you can rely on us to provide the cover you need:

•  Integrity: Our team don’t make any commission on selling an Early Termination Insurance policy, so you can be confident we’ll always act with your best interests in mind.

•  Flexibility: We’ll help you find the cover that matches your individual needs.

•  ResponsibilityWe’re fully regulated and authorised by the Financial Conduct Authority (FCA) and we maintain the highest ethical standards.

•  Knowledge: All of our team are fully trained specialists in motor insurance. And all claims are dealt with in-house, so you won’t have to worry about a frustrating long wait with a call centre.

•  ServiceOur customers are always our top priority. Our 5-star Feefo rating and the comments below show just how much our work is appreciated by the people we help.

See what our customers are saying about us

Sarah Bangert 16 Sep 2021


Easy to use and set up

Michael Bagnall 6 Mar 2020


Brilliant service had it with my previous car which unfortunately was wrote off they payed straight out with my back to invoice policy so I'm getting again with my new vehicle

Lilian Wong 20 Mar 2014


very competitive price & easy quotation form

David Macpherson 14 Mar 2019


Easy web site to follow and at a good price for all the options I wanted.

Chris Lilleystone 3 Sep 2014


Easy to follow and a good price.

Gillian Lyall 23 Dec 2013


Price is very competitive and documents understandable

Julia Ede 20 Sep 2021


Very easy to do

steve walker 15 Apr 2015



Carole Stanley 9 Jun 2014


An easy and convenient way to purchase GAP Insurance.

Chris Green 10 Feb 2022


Easy to use website




Helen 30 Mar 2017


Fast and hassle free

C King 18 Dec 2013


I was very impressed with the service when I asked for a quote so I went back to buy the policy.

J Cowan 5 Jan 2017


Great Service and has been for me over the last number of years including good advice and helpful changes  - Fantastic Highly Recommended

Judith Herrod 23 Jun 2014


Very straightforward, with clear explanations. Excellent!

Steven Gibbs 19 Nov 2020


Quick and easy to do, excellent value. There are to many careless people in carparks etc who just bang their car doors against other vehicles, having spent so much money on a new car, I wanted to ensure that my new purchases…

mrs ashley 3 Mar 2014


quick phone call, explained everything, a third of the price I was quoted from dealer , fantastic,

Joel Irwin 30 Mar 2014


good price, cheaper than dealer

Michael Johnson 16 Apr 2019


Great product....a third of the cost offered by the dealer!! A no brainer....

rob frankland 17 Dec 2013


a++++ very easy

Thomas Field 2 Jun 2021


Easy process from start to finish. Clarity of the information provided on the website aids the decision making process prior to purchase. Comparatively better cover and at a far better price point than quoted from the vehicle…

JAKE PACE 27 Sep 2021


Nice and easy!

john harris 16 Aug 2017


very helpful on helping me choose the right policy for me very easy to use online hopefully they live up to there 5 star if anything unforeseen happens

Craig Towers 28 Apr 2014


Thanks for talking through it with me on the phone before I purchased. Great help.

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Can you terminate a lease early?

Yes, early termination of your car’s lease, PCP or contract hire agreement is possible. However, doing so usually means having to pay a substantial amount of money. Depending on the terms of the arrangement, you may even be required to pay off the full value remaining on the contract, which could add up to many thousands of pounds.

That instance is the worst-case scenario: you’re being charged in full, without the benefit of actually being able to use the vehicle. But some situations may mean you have no choice but to end the agreement early. In some specific instances, Early Termination Insurance can cover the amount you owe to the finance company.

What is covered by Early Termination Insurance?

If you need to end your agreement before the vehicle’s return date, ETI will cover:

  • The early termination fees owed to the finance company OR
  • The difference between the early termination fees and the sale value, if your agreement allows the finance company to sell the vehicle.
  • Additionally, if you decide on an early termination of your car’s lease or finance arrangement but your contract states there are no fees to pay, this policy will pay you £500.

When am I covered by Early Termination Insurance?

You will be covered by your ETI policy if you have to return your vehicle early due to: 

  • Accidental death
  • Sickness for a minimum of 30 consecutive days
  • Loss of your driving licence for six months or more due to medical reasons
  • Being transferred for work outside of the policy territorial limits
  • Non-voluntary bankruptcy
  • Expatriation to your country of origin due to a change in legal requirements/English law.

Please see your policy wording for full terms and conditions.

When am I not covered by Early Termination Insurance?

You will not be covered by ETI if you have to end your lease or finance agreement due to:

  • Covid-19 or any pandemic declared by the World Health Organization
  • Death to due self-inflicted injury, alcohol or drug abuse
  • Death or loss of driving licence in the first 12 months of cover due to pre-existing medical conditions
  • Death due to medical conditions diagnosed as terminal before the start date of the policy
  • Any excess mileage charge or repair costs
  • Any loss in vehicle value due to damage or exceeded contract mileage
  • Any VAT element of the credit/finance agreement
  • Any difference between the Glass’s Guide retail value and the actual sale value of the vehicle
  • Any loss from an incident that renders the vehicle not roadworthy
  • Any loss occurring outside the territorial limits.

Please see your policy wording for full terms and conditions.

Am I eligible to take out Early Termination Insurance?

As with any policy, some restrictions apply:

  • Your principal residence must be in the UK.
  • Your vehicle must be a private motor car, mini-van, van, pick-up truck, light truck, motorcycle or sport utility vehicle. Anything else is not eligible for cover.
  • Your vehicle must have no more than seven seats and weigh no more than 3.5 tonnes.
  • Your vehicle cannot be insured under a commercial motor trader’s policy.

Please see your policy wording for full terms and conditions.

Do I need Early Termination Insurance?

Unlike standard motor insurance, taking out ETI is not a legal requirement. However, the early termination of a lease or contractual arrangement can prove enormously expensive and could leave you with a major financial headache.

Of course, no one plans for things to go so wrong that they have to return their vehicle early. But if the worst does happen then an Early Termination Insurance policy can provide that all-important protection.

How do I make a claim?

If you require an early termination of your lease and therefore need to claim via your ETI policy, there are three ways you can do this:

Your claim will be registered and you’ll be sent a form to be completed and returned, along with any documents that are needed to support your claim.


What is the claim limit?

Our Early Termination Insurance offers claim limits of £7,000 to £15,000.

How much does Early Termination Insurance cost?

Our ETI is available from as little as £190. When you factor in how much it could cost for an early termination of your car’s lease or finance agreement, we think it’s a small price to pay for that peace of mind.

Get a Quote.

How can I pay for my policy?

You can either pay for your Early Termination Insurance in one go, or you can choose to make monthly instalments – whichever works best for you.

Who is the insurer of this policy?

The insurer of our ETI policies is Acasta European Insurance Company Limited, (registered no. 96218). It is authorised and regulated by the Gibraltar Financial Services Commission and subject to regulation by the FCA and Prudential Regulation Authority for the conduct of UK business. The insurer is covered by the Financial Services Compensation Scheme.

Please see your policy wording for full terms and conditions.

Is this policy transferrable?

No, you cannot transfer your Early Termination Insurance to another vehicle. Should you no longer have possession of the vehicle, you can cancel your policy.

Please see your policy wording for full terms and conditions.

Can I cancel my Early Termination Insurance?

Yes, it is possible to cancel your policy. If you do so within the first 14 days (as long as a claim has not been made), you will receive a full refund. After that, you will receive a refund on this sliding scale:

  • Between 14 days and 25% of original policy duration: 50% refund
  • Between 26-50% of original policy duration: 25% refund
  • Between 51-75% of original policy duration: 10% refund
  • More than 75% of original policy duration: No refund

Please see your policy wording for full terms and conditions.